His warning was made despite China's surprise decision to cut interest rates for the second time in less than a month on Thursday, to support a slowing economy, but also reducing mortgage costs for borrowers.

"Currently, the property market adjustment is still at a crucial stage and we must unswervingly continue the work and make the fight against speculative property investment demand a long-term policy," he said, according to China's official Xinhua news agency.

"We must not allow housing prices to rebound that will waste all of our previous efforts."

House prices rose slightly in major cities in the second quarter, and the Premier said the government will take measures to curb speculative demand, and clamp down on market rumours that could fan speculation.

Restrictions in place already in China include capping the number of homes a family can buy, higher mortgage rates for people buying second homes, and larger deposits.

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Prices in China's major cities have become unaffordable for ordinary residents, partly as prices were driven higher amid the government's 4 trillion yuan (£406bn) stimulus launched in the wake of the financial crisis in 2008/09.